The Insurance Council of Australia (ICA) has called for an end to state and territory governments’ underwriting of statutory insurance such as workers’ compensation and compulsory third party (CTP).

Its submission to the Federal Government’s Competition Policy Review says public sector involvement is uncompetitive, inefficient and inconsistent.

It notes workers’ compensation schemes in NSW, Victoria, Queensland and SA are underwritten by governments, as are CTP schemes in Victoria, WA, Tasmania and SA – although the latter will be privatised in 2016 

“These governments are providing a financial service… and they are not subject to competition,” the submission states. 

“ICA believes the ongoing existence of government monopolies in the provision of statutory insurance is contrary to the framework for reforms of government services under the National Competition Policy.”

It says the Australian insurance industry is highly competitive, well regulated and well capitalised.

“Ongoing exclusions of general insurers as underwriters of workers’ compensation and… CTP schemes have a significant effect on the scope of the insurance market in Australia.

“If general insurers were underwriters of all these schemes, the size and strength of the insurance market would increase and improved economies of scale would be achieved.”

The review panel, led by Deloitte Access Economics partner and former Australian Fair Pay Commission chairman Ian Harper, is expected to produce a draft report in September.